China's Young Consumers Are Ready To Buy Western Products
MISSISSAUGA, ON, August 21, 2006 - UPS's second annual survey of China's growing class of urban consumers highlights a rapidly expanding market and an increased demand for American/western products. Providing insight into the Chinese consumer's mind, the survey highlights important information for Canadian companies that have yet to capitalize on the world's fastest growing consumer market.
The 2006 study found that more than half of urban Chinese consumers surveyed use credit or debit cards for shopping, and 84 per cent of those with credit cards expect their usage to increase or remain the same in the coming year. This is especially true in larger cities such as Beijing where 47 per cent of urban Chinese consumers are increasing their credit card use. The survey also reveals a preference for western-style packaging, especially for beauty products with 45 per cent of young high-income Chinese consumers saying they prefer western packaging.
"With 40 per cent of urban Chinese internet users having tried online shopping, Canada is witnessing the emergence of immense business opportunity", says Glenn Rice, President of UPS Canada. "There is a fast growing middle class for Canadian exports. At a time when Canada continues to source Asia for manufacturing, targeting this area for consumer purchasing can secure our position on the international business scene."
According to recent statistics from Canada's Department of Foreign Affairs, the trade imbalance between Canada and China is more than four to one in China's favour. In May 2006, for example, Canada imported CDN$2.67 billion worth of goods from China. At the same time Canada exported CDN$559 million to China.
"China's appetite for western-made consumer goods is emerging at a time when technology and supply chain infrastructure allow Canadian businesses to operate anywhere in the world. As online shopping trends increase, so will the opportunities for those that are ready to meet the consumer demand. The time for businesses to develop an export to China strategy is now," says Rice.
UPS offers a range of services to help businesses deliver to China. Last year, the company became the first carrier in the industry to acquire direct control of its operations in China. This year, the company expanded its international express service to 22 more business locations in China, bringing total number of cities served in the country to 330. Those cities account for roughly 85 per cent of China's international trade. Most recently, UPS opened two retail centres in Shanghai, providing customers with greater shipping convenience.
About the survey
Conducted by Research International, the survey was a quantitative study of 1,200 Chinese consumers in six Chinese cities: Beijing, Shanghai, Guangzhou, Shenyang, Chengdu and Wuhan. Respondents were all between the ages of 20 and 59 and have high household income levels in China (monthly income of RMB 3,000 or above in Beijing, Shanghai and Guangzhou, and RMB 2,000 or above in Shenyang, Chengdu and Wuhan). The survey was conducted as computer-aided telephone interviews between June 2 and 20, 2006.
For full survey results and other information about doing business in China, log onto www.pressroom.ups.com/chinasurvey.
Other Survey Results:
Age Differences
- Younger consumers prefer to see company logos on product packaging, whereas older lower income urban consumers are more likely to prefer Chinese icons on packaging.
Gender
- Male urban consumers prefer cool package colours such as blue, and survey respondents say that gifts for men should have blue or black packaging.
- Female consumers prefer warmer colours such as red and purple, and 50 per cent of respondents say that red packaging is best for gifts to be given to women.
Marketing/Packaging
- When marketing to Chinese consumers, product quality is the most important message to convey.
Advertising
- Young consumers prefer celebrity endorsements in advertising, whereas older consumers would rather see professional endorsements.
Notable industry facts:
Consumer Electronics
- The top four American consumer electronics products that Chinese, urban consumers want are: laptops, video/digital recording systems, digital cameras and mobile phones.
- For consumer electronics products, more consumers said that they prefer black packaging.
- Younger consumers prefer consumer electronics for gifts.
Apparel/textiles
- In this category, urban Chinese consumers want to buy American athletic shoes most (71 per cent).
- Forever in blue jeans? 64 per cent of urban Chinese consumers say they intend to buy American blue jeans this year - a significant increase from the 47 per cent who considered buying jeans in 2005.
- Chinese urban consumers particularly want to hear messages about quality for fashion/apparel products (65 per cent say quality is the most important message when advertising fashion products).
Healthcare/Pharmaceuticals
- More consumers want to see a doctor or other professional deliver messages about healthcare products in an advertisement (43 per cent) than for any other product category.
Purchasing/Shopping Behaviour
- Online purchases for fashion/accessories are up 10 per cent over 2005.
- Books/music/video is the No. 1 category for online shopping, especially for higher-income households.
- However, 73 per cent of urban Chinese consumers say that they have no access to American products online. But opportunities to boost online shopping are emerging in Shanghai, Beijing and Guangzhou, and among well paid young consumers.
About UPS
UPS is the world's largest express carrier and package delivery company. Employing more than 7,435 people in Canada and 407,200 worldwide, UPS delivers to every address in Canada and the United States, and operates in more than 200 countries and territories worldwide. UPS is also a leading provider of specialized transportation, logistics, capital and e-commerce services. The company can be found on the Web at UPS.com.
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